Over the last year, the S&P/ASX 200 (ASX: XJO) is down around 5%. However, many companies within this index have significantly underperformed the benchmark.
Below are three ASX shares that have lost roughly half or more of their market capitalisation over the last 12 months. Investors may now be wondering, are these companies undervalued?
1. Flight Centre Travel Group Ltd (ASX: FLT)
The share price of global travel agency Flight Centre Travel Group has tumbled 60.2% over the last 12 months.
Flight Centre has been one of the hardest-hit companies by the COVID-19 pandemic, which has led to flight bookings plummeting. Due to the deterioration in Flight Centre’s financials, the group did not pay a dividend in 2020.
Flight Centre CEO Graham Turner recently spoke to PerthNow where he said: “There should be no reason why international travel cannot resume once Australian travellers are widely vaccinated.”
Rask Media writer Jaz Harrison recently provided her view on the latest vaccine developments in this article: Can ASX travel shares fly higher?
I believe that international travel could lift-off late this year, with a resumption in dividends potentially in 2022.
You can read more on my view of Flight Centre here.
2. Unibail-Rodamco-Westfield CDI (ASX: URW)
The share price of global real estate giant Unibail-Rodamco-Westfield (Unibail) has been crunched to the tune of 47.2% over the last year. It must be noted the URW share price charged 22.4% higher this week, despite no announcements released by the group.
Unibail has been greatly impacted by the reduction in people physically shopping in-store due to COVID-19 lockdowns across Europe and the US. Unibail most recently updated the market on 22 January, announcing it had completed the disposal of the SHiFT office building for €620 million.
Unibail last paid holders a dividend/distribution of approximately $0.487 in April 2020. No dividends have yet been confirmed for 2021.
3. IOOF Holdings Limited (ASX: IFL)
Shares of financial services company IOOF have plummeted 57.2% since this time last year. IOOF shares sunk further this week after releasing its December quarterly results.
The financial planning and wealth management business had a tough year in 2020, with underlying net profit after tax (NPAT) declining 35% to $128.8 million. IOOF CEO Renato Mota attributed the underwhelming result to COVID-19-driven market movements.
IOOF shares currently trade on a trailing dividend yield of 8.8% and a price-to-earnings ratio of 20.8x. Last month, I explored whether IOOF’s high yield represented an opportunity or a dividend trap.
Summary
There are clear reasons why the share prices of these three companies have suffered over the last 12 months.
Of the group, I would prefer to own shares in Flight Centre. I believe the company will recover strongly due to the pent-up demand for people to travel. With that said, I am sure the Flight Centre share price will be highly volatile in 2021, as governments navigate the safest way for people to cross borders going forward.
